Labour shortage heightens losses in palm oil yield
palm oil / razak

Some estates have gone up to 20 days without harvesting, which in turn, affects the selling price of the edible oil

by SHAHEERA AZNAM SHAH / pic by RAZAK GHAZALI

THE labour shortage issue inherent in the domestic plantation industry is expected to reduce productivity and harvesting even further during the peak cycle season at the end of the year.

Malaysian Palm Oil Association said local planters have already lost up to about 25% of potential yield throughout the series of Movement Control Orders (MCOs) right to the current Recovery MCO (RMCO), without the services of some 37,000 foreign workers who had been sent home during the peak of the Covid-19 pandemic.

The MCO, which began in March, saw Malaysia closing off the borders — an exercise that will continue till Dec 31 following the extension of the RMCO.

The industry expects to face a shortage of 62,000 workers as many countries are still imposing travel restrictions, while many international entryways remain closed.

According to Malayan Agricultural Producers Association (MAPA), the severe shortage is estimated to cost planters about RM16 billion annually.

Industry expert MR Chandran said the reduced number of fruit collectors will not only compromise the volume of the fruits harvested, but the quality of the oil extracted due to the longer harvesting intervals.

He said some estates have gone up to 20 days without harvesting, compared to the optimum interval of 10 to 12 days or about three rounds of harvesting monthly, which in turn, affected the selling price of the edible oil.

Chandran said sufficient labour is important to maintain at least 12 to 15 days’ intervals to deter the crop from being overripe, which will affect the quality of the harvest.

“In turn, the oil would be sold at a discount. There are so many ramifications if the planters do not harvest at the right time,” he told The Malaysian Reserve.

Malaysia’s plantation industry relies extensively on foreign workers, particularly for menial jobs required at the estates.

It is estimated that foreign labourers accounted for 75% of the sector’s workforce.

While the bulk of the harvesting processes have been mechanised, the workforce is necessary for the manual task of slitting the palm fruits and fronds off the trees, and engineers have not found the automation solution for it due to the intricacies of the job.

To expedite the process, the Malaysian Palm Oil Board has developed a motorised cutter, namely Cantas, which is specifically designed for harvesting fruits and cutting fronds for trees less than 4.5m in height.

Chandran said it is still an issue as there are still oil palm trees that are being grown at the height of above five metres, and planters would usually avoid dealing with taller trees even if they are still producing fruits.

He said it is an even bigger issue for planters when the trees are more than six metres as more labourers are needed to work on them.

“We used to keep our plants for 25 years before replanting. Now, because of the shortage of workers, the companies would replant at 20 to 22 years — which is criminal because the trees are still yielding,” he said.

As the country is still closed off from international travel, attempts to recruit locals to work at the plantation have been intensified.

According to Sime Darby Plantation Bhd, only 300 locals have signed up to fill the vacant positions at its plantations, way below the 2,000 spots on offer.

RHB Research Institute Sdn Bhd VP of equity research Hoe Lee Leng said while Malaysia aims to reduce its dependence on foreign labour, it is also difficult to truly automate the entire process of the harvesting.

“Recruiting locals is not as easy as people make it up to be. Then, it comes to the question of mechanisation which is something that planters want to implement.

“Harvesting is something that cannot really be fully automated, especially in choosing the ripe fruits to be slit, compared to the seed fertilisation and other processes,” she said.

Agricultural scientists have been perfecting the breeding genes of dwarf oil palm trees which is hoped to speed up the harvesting time for each tree, and at the same time, help relieve the labour shortage issue.

The thinner and shorter dwarf tree is said to be about 30% smaller than the average oil palm trees. It is about five metres in height compared to an average of 7.5m trees.

Currently, the dwarf trees have been planted in several estates, including in Bukit Lawiang in southern Johor.

Hoe added that while the alteration in the genetics of the trees could speed up the harvesting process, it would also take years before the trees are planted and could be harvested.